Pub Date : 2017-06-01DOI: 10.35866/CAUJED.2017.42.2.002
K. Williams
This paper studies the relationship between FDI and economic growth in a system of simultaneous equations framework. The system of simultaneous equations model exploits that the relationship between FDI and growth is endogenously determined with respect to each other. Our empirical results yield that growth responds significantly positive to FDI. FDI on the other hand does not respond significantly to growth. In addition, we construct several dimensions of political instability and document that political instability has differential effect on FDI and growth. We show that the effect that these dimensions of political instability have on growth and FDI is not different in Sub-Saharan Africa, a region that experiences high incidence of politically instability.
{"title":"Foreign Direct Investment, Economic Growth, and Political Instability","authors":"K. Williams","doi":"10.35866/CAUJED.2017.42.2.002","DOIUrl":"https://doi.org/10.35866/CAUJED.2017.42.2.002","url":null,"abstract":"This paper studies the relationship between FDI and economic growth in a system of simultaneous equations framework. The system of simultaneous equations model exploits that the relationship between FDI and growth is endogenously determined with respect to each other. Our empirical results yield that growth responds significantly positive to FDI. FDI on the other hand does not respond significantly to growth. In addition, we construct several dimensions of political instability and document that political instability has differential effect on FDI and growth. We show that the effect that these dimensions of political instability have on growth and FDI is not different in Sub-Saharan Africa, a region that experiences high incidence of politically instability.","PeriodicalId":15602,"journal":{"name":"Journal of economic development","volume":"42 1","pages":"17-37"},"PeriodicalIF":0.0,"publicationDate":"2017-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44676376","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2017-06-01DOI: 10.35866/CAUJED.2017.42.2.005
Adel Boughrara, Ichrak Dridi
The aim of this paper is twofold. Firstly, it seeks to investigate the nature of the relationship between inflation targeting (hereafter, IT) regime and foreign portfolio investment (hereafter, FPI) inflows. Secondly, it inquires whether IT is able to control for FPI volatility in emerging countries or not. The sample covers the period 1986-2010 and contains 38 emerging countries, of which 13 countries have adopted IT. By addressing the self-selection bias associated to the adoption of IT via a variety of propensity score matching techniques, the paper results show that the adoption of a full-fledged IT increases FPI inflows into emerging countries, but they show no robust results for containing FPI volatility.
{"title":"Does Inflation Targeting Matter for Foreign Portfolio Investment: Evidence from Propensity Score Matching","authors":"Adel Boughrara, Ichrak Dridi","doi":"10.35866/CAUJED.2017.42.2.005","DOIUrl":"https://doi.org/10.35866/CAUJED.2017.42.2.005","url":null,"abstract":"The aim of this paper is twofold. Firstly, it seeks to investigate the nature of the relationship between inflation targeting (hereafter, IT) regime and foreign portfolio investment (hereafter, FPI) inflows. Secondly, it inquires whether IT is able to control for FPI volatility in emerging countries or not. The sample covers the period 1986-2010 and contains 38 emerging countries, of which 13 countries have adopted IT. By addressing the self-selection bias associated to the adoption of IT via a variety of propensity score matching techniques, the paper results show that the adoption of a full-fledged IT increases FPI inflows into emerging countries, but they show no robust results for containing FPI volatility.","PeriodicalId":15602,"journal":{"name":"Journal of economic development","volume":"42 1","pages":"67-86"},"PeriodicalIF":0.0,"publicationDate":"2017-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41452518","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2017-06-01DOI: 10.35866/CAUJED.2017.42.2.004
Neila Ben Afia and Sana Harbi
We study the relationship between happiness, economic growth and military endeavor. A distinction is drawn between the direct and the indirect impact of military endeavor on happiness which operates through the impact of military endeavor on income and the impact of income on happiness. Using panel data analysis for 45 countries covering the period from 2000 to 2013, direct and indirect impacts of military endeavor on happiness are estimated. Our results show that the military endeavor has a positive direct impact on happiness. Indirect effects are found to be positive, the total effect of military endeavor on happiness is positive.
{"title":"Empirical Analysis of the Relationship between Military Endeavor, Economic Growth and Happiness","authors":"Neila Ben Afia and Sana Harbi","doi":"10.35866/CAUJED.2017.42.2.004","DOIUrl":"https://doi.org/10.35866/CAUJED.2017.42.2.004","url":null,"abstract":"We study the relationship between happiness, economic growth and military endeavor. A distinction is drawn between the direct and the indirect impact of military endeavor on happiness which operates through the impact of military endeavor on income and the impact of income on happiness. Using panel data analysis for 45 countries covering the period from 2000 to 2013, direct and indirect impacts of military endeavor on happiness are estimated. Our results show that the military endeavor has a positive direct impact on happiness. Indirect effects are found to be positive, the total effect of military endeavor on happiness is positive.","PeriodicalId":15602,"journal":{"name":"Journal of economic development","volume":"42 1","pages":"51-66"},"PeriodicalIF":0.0,"publicationDate":"2017-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44404366","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2017-03-01DOI: 10.35866/CAUJED.2017.42.1.004
Elvin Afandi, N. Habibov
We study the factors determining the level of trust in banks before and after the 2007- 08 financial crisis and how this crisis reshaped banking trust in transitional countries. We find that younger, rural, educated, banked and generally trusting people tend to have higher confidence towards banks in both periods. Among country-level covariates, growth rate of GDP and Rule of Law remain significantly associated with banking trust in both periods. Finally, our findings indicate that the financial crisis has temporary impact on trust in banks since pulling back the rate of GDP growth tends to recover banking trust.
{"title":"Pre- and Post-Crisis Trust in Banks: Lessons from Transitional Countries","authors":"Elvin Afandi, N. Habibov","doi":"10.35866/CAUJED.2017.42.1.004","DOIUrl":"https://doi.org/10.35866/CAUJED.2017.42.1.004","url":null,"abstract":"We study the factors determining the level of trust in banks before and after the 2007- 08 financial crisis and how this crisis reshaped banking trust in transitional countries. We find that younger, rural, educated, banked and generally trusting people tend to have higher confidence towards banks in both periods. Among country-level covariates, growth rate of GDP and Rule of Law remain significantly associated with banking trust in both periods. Finally, our findings indicate that the financial crisis has temporary impact on trust in banks since pulling back the rate of GDP growth tends to recover banking trust.","PeriodicalId":15602,"journal":{"name":"Journal of economic development","volume":"42 1","pages":"73-94"},"PeriodicalIF":0.0,"publicationDate":"2017-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47459756","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2017-03-01DOI: 10.35866/CAUJED.2017.42.1.001
Y. Jafari, M. Farhadi, A. Zimmermann, Masoud Yahoo
This paper applies the Environmental Kuznets Curve (EKC) model to examine the impact of trade openness, foreign direct investment liberalization, the decreasing role of the state, energy consumption and urbanization on per capita emission in countries at various stages of economic development and as a group. For this purpose, a dynamic panel estimation applying the Arellano-Bondi¯s Generalized Method of Moments (GMM) was conducted using the average of five-year observations from 1980?2009. The findings suggest that while trade and Foreign Direct Investment (FDI) are not expected to affect environmental quality, increasing role of the state has a negative and significant impact only in developed countries. Further, the results suggest that energy consumption has a significant impact on all countries regardless of their stage of development, while urbanization affects environmental quality only in the least developed countries.
{"title":"Economic Liberalization and the Environmental Kuznets Curve: Some Empirical Evidence","authors":"Y. Jafari, M. Farhadi, A. Zimmermann, Masoud Yahoo","doi":"10.35866/CAUJED.2017.42.1.001","DOIUrl":"https://doi.org/10.35866/CAUJED.2017.42.1.001","url":null,"abstract":"This paper applies the Environmental Kuznets Curve (EKC) model to examine the impact of trade openness, foreign direct investment liberalization, the decreasing role of the state, energy consumption and urbanization on per capita emission in countries at various stages of economic development and as a group. For this purpose, a dynamic panel estimation applying the Arellano-Bondi¯s Generalized Method of Moments (GMM) was conducted using the average of five-year observations from 1980?2009. The findings suggest that while trade and Foreign Direct Investment (FDI) are not expected to affect environmental quality, increasing role of the state has a negative and significant impact only in developed countries. Further, the results suggest that energy consumption has a significant impact on all countries regardless of their stage of development, while urbanization affects environmental quality only in the least developed countries.","PeriodicalId":15602,"journal":{"name":"Journal of economic development","volume":"54 18","pages":"1-16"},"PeriodicalIF":0.0,"publicationDate":"2017-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41245438","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2017-03-01DOI: 10.35866/CAUJED.2017.42.1.003
Soumyanetra Munshi
This paper propounds a contract-theoretic model where dowry acts as a screening device to differentiate grooms of varying qualities. In 'arranged' marriage settings that are characterized by incomplete information in the sense that the true quality of the groom remains unobservable to the bride, and in the presence of observable traits like education that are easier for the better quality groom to achieve, education-dowry contracts can potentially serve as a screening instrument. Moreover, increasing dowry levels can be explained through increased educational attainments brought about by modernization and government policies. The paper also discusses historical and narrative evidences in support of its main hypotheses. [IGIDR WP-2014-006].
{"title":"Arranged marriage, education and dowry: A Contract-theoretic perspective","authors":"Soumyanetra Munshi","doi":"10.35866/CAUJED.2017.42.1.003","DOIUrl":"https://doi.org/10.35866/CAUJED.2017.42.1.003","url":null,"abstract":"This paper propounds a contract-theoretic model where dowry acts as a screening device to differentiate grooms of varying qualities. In 'arranged' marriage settings that are characterized by incomplete information in the sense that the true quality of the groom remains unobservable to the bride, and in the presence of observable traits like education that are easier for the better quality groom to achieve, education-dowry contracts can potentially serve as a screening instrument. Moreover, increasing dowry levels can be explained through increased educational attainments brought about by modernization and government policies. The paper also discusses historical and narrative evidences in support of its main hypotheses. [IGIDR WP-2014-006].","PeriodicalId":15602,"journal":{"name":"Journal of economic development","volume":"42 1","pages":"35-71"},"PeriodicalIF":0.0,"publicationDate":"2017-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49158477","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2017-03-01DOI: 10.35866/CAUJED.2017.42.1.005
M. Hammami
This study aims to examine the nexus between economic growth, FDI inflows and energy consumption on a panel of 17 countries using a i®growth modeli¯ framework and simultaneous-equation models estimated by the generalized method of moments (GMM) over the 1990-2012 period. We also implement these empirical models for 17 countries selected on the basis of data availability. They include: (a) 12 Middle Eastern countries, namely: Saudi Arabia, Qatar, Oman, Kuwait, Lebanon, United Arab Emirates, Iraq, Turkey, Iran, Syria, Jordan and Yemen, (b) 5 North African countries, namely: Egypt, Morocco, Tunisia, Algeria and Libya. Our results indicate that there is a bidirectional causal relationship between FDI inflows and economic growth, as between well as energy consumption and economic growth. Besides, there is a unidirectional causal relationship between energy consumption to FDI inflows for the global panel. This implies that the increase of energy consumption increases the FDI inflows for individual and collective countries.
{"title":"Exploring Links between FDI Inflows, Energy Consumption, and Economic Growth: Further Evidence from MENA Countries","authors":"M. Hammami","doi":"10.35866/CAUJED.2017.42.1.005","DOIUrl":"https://doi.org/10.35866/CAUJED.2017.42.1.005","url":null,"abstract":"This study aims to examine the nexus between economic growth, FDI inflows and energy consumption on a panel of 17 countries using a i®growth modeli¯ framework and simultaneous-equation models estimated by the generalized method of moments (GMM) over the 1990-2012 period. We also implement these empirical models for 17 countries selected on the basis of data availability. They include: (a) 12 Middle Eastern countries, namely: Saudi Arabia, Qatar, Oman, Kuwait, Lebanon, United Arab Emirates, Iraq, Turkey, Iran, Syria, Jordan and Yemen, (b) 5 North African countries, namely: Egypt, Morocco, Tunisia, Algeria and Libya. Our results indicate that there is a bidirectional causal relationship between FDI inflows and economic growth, as between well as energy consumption and economic growth. Besides, there is a unidirectional causal relationship between energy consumption to FDI inflows for the global panel. This implies that the increase of energy consumption increases the FDI inflows for individual and collective countries.","PeriodicalId":15602,"journal":{"name":"Journal of economic development","volume":"42 1","pages":"95-117"},"PeriodicalIF":0.0,"publicationDate":"2017-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42332460","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2017-03-01DOI: 10.35866/CAUJED.2017.42.1.002
Mohsen Bahmani-Oskooee and Hanafiah Harvey
Since advent of current float in 1973, the literature on the impact of exchange rate volatility on trade flows has grown so rapidly that most countries have their own literature and Singapore as our country of concern is no exception. Previous studies have investigated the response of aggregate trade flows of Singapore with the rest of the world to exchange rate volatility and have found mostly insignificant link. In this paper we argue that they all suffer from aggregation bias and concentrate on trade flows between Singapore and her major partner, Malaysia. After disaggregating their trade flows by commodity we find that exchange rate volatility has significant short-run effects in 70 out of 156 exporting industries and in 73 out of 155 importing industries. However, short-run effects last into the long run only in 46 exporting and 36 importing industries. We also find that less than 50% of Singaporei¯s industries were affected by the Asian Financial Crisis in 1997.
{"title":"Exchange Rate Volatility and Its Impact on Commodity Trade Flows between Singapore and Malaysia","authors":"Mohsen Bahmani-Oskooee and Hanafiah Harvey","doi":"10.35866/CAUJED.2017.42.1.002","DOIUrl":"https://doi.org/10.35866/CAUJED.2017.42.1.002","url":null,"abstract":"Since advent of current float in 1973, the literature on the impact of exchange rate volatility on trade flows has grown so rapidly that most countries have their own literature and Singapore as our country of concern is no exception. Previous studies have investigated the response of aggregate trade flows of Singapore with the rest of the world to exchange rate volatility and have found mostly insignificant link. In this paper we argue that they all suffer from aggregation bias and concentrate on trade flows between Singapore and her major partner, Malaysia. After disaggregating their trade flows by commodity we find that exchange rate volatility has significant short-run effects in 70 out of 156 exporting industries and in 73 out of 155 importing industries. However, short-run effects last into the long run only in 46 exporting and 36 importing industries. We also find that less than 50% of Singaporei¯s industries were affected by the Asian Financial Crisis in 1997.","PeriodicalId":15602,"journal":{"name":"Journal of economic development","volume":"42 1","pages":"17-33"},"PeriodicalIF":0.0,"publicationDate":"2017-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43016945","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2017-01-01DOI: 10.24311/JED/2017.24.1.04
Dinh Thi Thu Hong, Nguyen Thi Mai Trang
Dec. 31, 2016 In oil-exporting countries such as members of the OPEC, fluctuations in oil prices exert a significant impact on the domestic economy. Currently, a sharp reduction in oil prices results in several adverse effects; however, for such a crude-oil exporter that is also an importer of petroleum products as Vietnam, does a rise or drop in oil prices is beneficial to its development? This paper attempts to determine the oil price threshold while analyzing oil price effects on several macro factors, such as inflation, GDP growth, budget deficit, and unemployment rate over the 2000–2015 period. Using TVAR model, we detect an oil price threshold of USD27.6/barrel. Moreover, an increase in the price of oil, which exceeds this threshold, will cause a rise in inflation, budget deficit, and unemployment rate. Still, there is no significant evidence of the impact of oil prices on GDP growth.
{"title":"Nonlinear effects of oil prices on inflation, growth, budget deficit, and unemployment","authors":"Dinh Thi Thu Hong, Nguyen Thi Mai Trang","doi":"10.24311/JED/2017.24.1.04","DOIUrl":"https://doi.org/10.24311/JED/2017.24.1.04","url":null,"abstract":"Dec. 31, 2016 In oil-exporting countries such as members of the OPEC, fluctuations in oil prices exert a significant impact on the domestic economy. Currently, a sharp reduction in oil prices results in several adverse effects; however, for such a crude-oil exporter that is also an importer of petroleum products as Vietnam, does a rise or drop in oil prices is beneficial to its development? This paper attempts to determine the oil price threshold while analyzing oil price effects on several macro factors, such as inflation, GDP growth, budget deficit, and unemployment rate over the 2000–2015 period. Using TVAR model, we detect an oil price threshold of USD27.6/barrel. Moreover, an increase in the price of oil, which exceeds this threshold, will cause a rise in inflation, budget deficit, and unemployment rate. Still, there is no significant evidence of the impact of oil prices on GDP growth.","PeriodicalId":15602,"journal":{"name":"Journal of economic development","volume":"24 1","pages":"73-89"},"PeriodicalIF":0.0,"publicationDate":"2017-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68914206","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2016-12-01DOI: 10.35866/CAUJED.2016.41.4.003
A. Siddique
This paper argues that poverty in a country is endogenously determined by the countryi¯s long-term economic development strategy. It empirically examines the effects of adopting a Comparative Advantage-Defying (CAD) development strategy - which attempts to encourage economic actors to deviate from the economyi¯s existing comparative advantages in their entry into an industry or choice of technology - on its level of poverty. This paper also examines how this effect of CAD differs with the level of an economyi¯s financial development, which is the most important channel for the effects of CAD on poverty to manifest themselves. Data for the period of 1963 to 1999 (cross-section average over this time period) and 1980 to 2000 (panel with 5 years interval) for 113 countries are used in the analysis. We find that the more aggressively a country adopts CAD development strategy, the higher the level of poverty incidence. But a high level of financial development reduces the poverty-increasing impact of adopting CAD. The policy recommendation by this paper is to adopt Comparative Advantage-Following (CAF) development strategy, which facilitates the actorsi¯ entry into an industry according to the economyi¯s existing comparative advantages, by all the countries in order to reduce poverty incidence.
{"title":"Comparative Advantage Defying Development Strategy and Cross Country Poverty Incidence","authors":"A. Siddique","doi":"10.35866/CAUJED.2016.41.4.003","DOIUrl":"https://doi.org/10.35866/CAUJED.2016.41.4.003","url":null,"abstract":"This paper argues that poverty in a country is endogenously determined by the countryi¯s long-term economic development strategy. It empirically examines the effects of adopting a Comparative Advantage-Defying (CAD) development strategy - which attempts to encourage economic actors to deviate from the economyi¯s existing comparative advantages in their entry into an industry or choice of technology - on its level of poverty. This paper also examines how this effect of CAD differs with the level of an economyi¯s financial development, which is the most important channel for the effects of CAD on poverty to manifest themselves. Data for the period of 1963 to 1999 (cross-section average over this time period) and 1980 to 2000 (panel with 5 years interval) for 113 countries are used in the analysis. We find that the more aggressively a country adopts CAD development strategy, the higher the level of poverty incidence. But a high level of financial development reduces the poverty-increasing impact of adopting CAD. The policy recommendation by this paper is to adopt Comparative Advantage-Following (CAF) development strategy, which facilitates the actorsi¯ entry into an industry according to the economyi¯s existing comparative advantages, by all the countries in order to reduce poverty incidence.","PeriodicalId":15602,"journal":{"name":"Journal of economic development","volume":"41 1","pages":"45-78"},"PeriodicalIF":0.0,"publicationDate":"2016-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"70075742","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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